Editor's Note: Total Retail Publishes its 2024 Retail Technology Report

Total Retail is pleased to announce the release of the 2024 Retail Technology Report: An Analysis of Market Trends, Buying Behaviors, and Future Opportunities. This annual report serves as a valuable research tool for retailers and brands to help them better understand the technology landscape within the industry, and then apply those learnings within their own organizations.

With consumer behavior evolving and businesses prioritizing cost-efficient operations, retailers are increasingly turning to technology to help them keep pace — both in the eyes of their customers as well as their employees. This is the mandate that all retailers must accept, no matter their size, product vertical, primary sales channel, etc. However, the constraints of budget, talent and other resources necessitate that retailers invest wisely in technology systems that truly move the needle for their businesses, whether it be in the form of improved customer or employee experience, revenue generation, cost savings, among other benefits. A well-defined tech road map is integral to the future success of any retail organization.

To aid in charting that tech road map, Total Retail has surveyed its audience of retail executives and technology decision-makers to better understand the impact technology is having not only on their internal operations, but also on the shopping experiences of their customers. We asked them about their companies’ current usage of technology, including the specific solutions within their tech stacks; future technology plans, including allocation of budget and how that may be adjusted going forward; and the processes within their organizations for vetting and purchasing technology from third-party solution providers.

A total of 214 respondents took the online survey. The respondents represented a mix of retail organizations (omnichannel, brick-and-mortar-only, online-only), as well as CPG and wholesale brands. The sizes of those companies ranged in annual revenue from $1 billion or greater to less than $1 million.

The Rising Influence of Technology on Retailers and Brands

Here's a look at some of the key findings to emerge from the survey:

• After a brief slowdown in tech spending seen in our 2023 survey, retailers are once again planning to increase their technology budgets in the next 12 months. More than three-quarters of respondents (76 percent) said their company’s overall tech budget would increase in the next year, while only 18 percent plan to decrease spending on technology during that time. For those increasing technology spending, by how much will they be doing so? Most respondents (88 percent) plan to increase their technology budget by 6 percent to 10 percent year-over-year.
• Artificial intelligence is the technology most widely used by retailers today. Sixty-one percent of respondents said they're currently using some form of AI within their businesses. The ubiquitous nature of AI and its potential application across so many business functions (e.g., customer service, marketing, inventory management, supply chain management, etc.) makes its No. 1 ranking unsurprising.
• While cost is still the No. 1 factor that retailers consider when making technology investment decisions (cited by 38 percent of respondents), there are several other considerations that are important to them. They include vendor support (20 percent), amount of employee training required (17 percent), integration with existing systems (16 percent), and time to implement (9 percent). Therefore, technology service providers would be wise to offer their current and prospective retail clients a well-rounded solution that ticks of all the boxes: competitive pricing, top-notch support, minimal training, plug-and-play functionality, and speed to market.
• In a similar vein, respondents were surveyed on their top challenges when implementing a new solution into their tech stack. Not surprisingly, many of their answers aligned with their consideration sets when making tech investments. At the top of the list was generating consumer awareness and adoption of new technologies, selected by 43 percent of respondents. Yet it was closely followed by several other challenges, including proving return on investment (39 percent), integrating with existing technology (33 percent), generating employee awareness and adoption of new technologies (33 percent), and training staff (28 percent).

For more of this year's survey data as well as analysis of what it means for the retail industry, download the 2024 Retail Technology Report: An Analysis of Trends, Buying Behaviors, and Future Opportunities report.